To answer this question, the appropriate formula is the discounted dividend model without growth which is presented as follows:
P = DIV / r
where
P = price of the stock
DIV = the amount of the annual dividend
r = the required rate of return
Using the above formula:
V = $6.50 / 6.5% = $6.50 / 0.065 = $100
The price of the stock would be approximately $100 using the discounted dividend model.
70 percent dividend income exclusion on the tax returns of corporations. That is, if a corporation owns preferred stock, it can exclude 70 percent of dividend income and pay income taxes on only 30 percent of dividend income, both preferred and common stock.
The formula for this problem is as follows: PV(perpetuity)=CF/i With the application of the numbers from this problem, you would plug them in as follows: 75/.04 = $1875 < your answer. Hope that helps
8.5/40=21.25%
A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is rs 11%, and the expected constant growth rate is 5%. What is the current stock price?
The rate of return on the stock is dependent on the public's appraisal of the current economic situation and of the company. However, on the long term it is dependent on the management's efforts.
70 percent dividend income exclusion on the tax returns of corporations. That is, if a corporation owns preferred stock, it can exclude 70 percent of dividend income and pay income taxes on only 30 percent of dividend income, both preferred and common stock.
A corporation with a marginal tax rate of 34 percent would receive what after-tax dividend yield on a 12 percent coupon rate preferred stock bought at par assuming a 70 percent dividend exclusion?
Without knowing the age of the stock, it is not possible to assess the value of Ezzell Corporation preferred stock. The par value is $100. If the annual dividend is reinvested the value of holdings would have an 8% increase annually, amalgamated plus an increase for any change in value.
The formula for this problem is as follows: PV(perpetuity)=CF/i With the application of the numbers from this problem, you would plug them in as follows: 75/.04 = $1875 < your answer. Hope that helps
8.5/40=21.25%
no
A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is rs 11%, and the expected constant growth rate is 5%. What is the current stock price?
A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is rs = 10.5%, and the expected constant growth rate is g = 6.4%. What is the stock's current price?
11.04 12.40 13.76 15.00 9.42
20 %
The preferred wording would be, "what percent".
76%